Tuesday, September 3, 2013

Storage subsidy will energize German battery uptake

Consultancy IHS says the German government's energy storage subsidy will do for batteries what FiTs did for PV eight years ago but interested homeowners need to move fast.

Market research consultancy IHS is predicting the German government's energy storage subsidy will do for battery storage what the FiT program did for PV uptake in the country.

IHS research manager Sam Wilkinson said: "The German energy storage subsidy is forecast to kick-start the adoption of solar PV energy storage systems in a similar way as its feed-in tariff system ignited the PV industry eight years ago."

Under the terms of the subsidy, householders installing a battery-based storage system as part of a new PV system up to 30 kW in size can take out a low-interest loan from German state bank KfW for €600/kW (US$790/kW) with a ceiling of 30% of the system costs.

But households hoping to take advantage of the subsidy this year may already be too late with €18.7 million of this year's €25 million funding already allocated and German solar industry association the Bundesverband Solarwirtschaft (BSW) reporting in addition to the 1,100 PV systems for which the subsidy has been approved, there are a further 4,800 applications awaiting approval.

When announcing details of the subsidy in April, the German government said it anticipates a further €25 million of KfW funding to be allocated next year.

IHS' Wilkinson says the popular subsidy, together with falling storage system costs and a decreasing FiT – in tandem with rising conventional electricty prices – add up to self consumption becoming the preferred option for homeowners rather than generating electricity for the grid in return for FiT payments.

With Japan offering a similar storage subsidy for lith-ion based residential systems and California subsidizing 'advanced energy storage' in systems up to 3 MW, IHS is predicting energy storage will be worth $9 billion in revenue by 2013.

The consultancy says residential systems will dominate the German energy storage market with 30 MW already supported by the subsidy since its launch four months ago.